The paper "Benefits and Challenges of CSR in Oil and Gas Companies " is a perfect example of business coursework. This chapter discusses the different views and opinions of varied authors regarding corporate social responsibility. The chapter equally discusses the input of theories related to CSR in the theoretical literature and expounds on them from literature studies carried out but several authors. 2.1 Theoretical Literature The concept of Corporate Social Responsibility (CSR) emerged in the 1950s and is seen as a practice that is relatively uncoordinated (Klonoski, 1991). Various different definitions have been put across to suggest the meaning of corporate social responsibility.
Several decades later the definitions of CSR are still variant and are based on the individuals and the responsibility that accompanies the practice (Turker, 2009). Earlier authors such as Milton Friedman (1970) defined CSR as a mere commitment to follow the regulations of the government and abide by rules related to society. Freeman (1984) on the other hands used the stakeholder theory to suggest that the needs of stakeholders; who include everyone affecting or being affected by the organization should be put before the beginning of any operation.
The stakeholder theory is presently used as an important structure for CSR in certifications and global reporting initiatives. Blowfield and Murray (2014) suggest that companies do not see the need to practice CSR as they pay taxes to the government which has the duty to see to the welfare of the society. This translates to undermining the importance of CSR in companies that do not see the need for practising social welfare. A different school of thought identifies CSR as the commitment to the improvement of social welfare as opposed to a commitment to follow government regulations.
Spicer (1978) defines CSR as business engagements to improve the social wellbeing of groups while the World Business Council for Sustainable Development (WBCSD) in 1999 stated that CSR is an obligation of companies and their stakeholders to attain sustainable social and economic progress through the enhancement of the living circumstances of those who work for the corporation and those who are directly affected by the works of the corporation (Turker, 2009). These two schools of thoughts; CSR as a commitment to government regulation and CSR as social welfare are extensively used in companies today making them among the most important definitions of CSR (Aigner, 2016).
The first thought suggests that CSR is secondary to make a profit (Friedman, 1970) while the subsequent thought purports that CSR should come before profit (Spicer, 1978). The third argument on CSR exists stating that CSR should be an equal balance between the interests of a company and obligations to its stakeholders; between the company and social responsibility and between shareholders and social obligations (Turker, 2009).
Further studies in CSR reveal that it is an act of doing more social good that goes beyond the interests of the firm or any other legal requirements (McWilliams and Siegel, 2001). From the definitions above, the first group believes that the only purpose for a company to exist is to make money for stakeholders and that their responsibility ends at paying taxes and following the laws (Friedman, 1970). A second group idealizes companies as a charitable organization; a group whose primary goal is to improve the social welfare for all.
Unfortunately, by prioritizing social responsibility, the group puts the financial responsibility of the company to its shareholders on the back burner, seemingly not realizing that companies must make a profit, and cannot operate or exist without it (Spicer, 1978). A third group has a more comprehensive meaning of social responsibility. They consider it as the commitment to reduce the adverse impacts of a company’ s operating, while still pursuing profits and owners’ interests (Turker, 2009).
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